U/s. 269SS & Penalty U/s. 271D of Income Tax Act

This query is : Resolved

amar (Querist)
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18 December 2010 One of my client(Individual) is in construction Business. During the A.y. 2009-10 he has accepted advance money for sale of land in cash Rs. 3.00 Crores. As on date there is no Sale deed and possession of the land made.
My question is :
(1) Whether this transaction attract section 269SS ?
(2) What about penalty u/s. 271D ?
(3) IF yes, than provide me case law favouring the assessee.

Thanks

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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19 December 2010 1. Yes sec 269SS attract.
2. Penalty u/s 271D is equal to deposit amount.
3.If asessee can explain that there is reasonable cause in accepting the money in cash , no penalty u/s 271D is leviable. Without knowing the reason , it is difficult to provide case laws.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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20 December 2010 As per S.269SS
No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft if,—

(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit ; or

(b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid ; or

(c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b),

is 61[twenty] thousand rupees or more :

This Section Applies only on Loans and Deposits and NOT ON ADVANCES MIND IT. S.269SS Not Applicable in Your Case.
Thanks and Regards
Ankit Gulgulia

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amar

amar (Querist)
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22 December 2010 Thanks,

It so happen that assessee has received cash of Rs. 3 Crores from Mr. X . No sale agreemet/possession was made. In between there was search action on Mr. X and a diary found in which this amount mentioned and MOU between these parties was found.In this MOU it is clearly mentioned that whatever amount(i.e. 3 Crores) Mr. X has paid to the assesee was as a full advance payment for sale of land.
Pls. Provide me case law favouring the assessee.